Steel heavyweight seeks relief from pension payments

The pension burden has proven too heavy for steel giant Essar, which has sought relief from payments to its defined benefit program — and eliminated the plan entirely for new-hires.

Essar Steel Algoma, headquartered in Sault Ste. Marie, Ont., has petitioned the provincial government for relief from its mounting pension obligations, citing financial pressures as the leading cause behind the plan’s deficit.

Plan funding obligations have more than tripled in recent years to a level the company can no longer sustain. Should the proposal be approved, Essar will stretch the time it takes to make payments to its defined benefit (DB) plan.